Car accident injury settlement negotiations are initiated by sending a “settlement letter” or a “demand letter” (two different names for the same thing) to the responsible insurance company.

The demand letter sets the parameters and tone of the negotiations. Therefore, it is essential that yours is thorough, professional and well-documented.

This article concerns the content of your demand letter. To learn more about the process of writing the letter, read my article about “How To Write An Insurance Claim Letter.”

What Is Included In A Car Accident Demand Letter

There should be two main sections in your demand letter. One section should cover liability and show why you are legally entitled to recover damages. The other section should explain in detail the damages you are claiming.


Start by objectively explaining how the accident happened. Something like this . . .

On Tuesday, March 5, 2013, at about 10:00 a.m., I was sitting in my 2012 Toyota Camry at a red light at the intersection of Grove Road and Foxhall Street, in London, Texas. Suddenly, and without any warning, my car was rammed from the rear by a 2006 Chevrolet Suburban which was driven by your policyholder, Mark Smith.

I recommend that you also briefly explain how the at-fault driver was negligent, that is, what rules of the road he violated. Something like this . . .

Mr. Smith negligently failed to pay adequate attention to his driving, he failed to see my vehicle, he failed to control the speed of his vehicle and he did not keep a safe distance between his vehicle and mine.

Mr. Smith was clearly negligent and his negligence was the sole cause of this accident.

Especially if there was extensive damage to your vehicle, or to the striking vehicle, explain the impact and the damage it did. You can say something like this . . .

The force of the impact drove my vehicle into, and through, the intersection. There was extensive damage to the rear of my vehicle which cost $8,132.88 to repair. I understand that Mr. Smith’s vehicle was totaled.

Also add any aggravating circumstances, such as extreme speed or drunk driving. You can say something like this . . .

Investigation revealed that Mr. Smith was intoxicated. He was charged with drunk driving and he later pleaded guilty to that charge in court.

That’s all you need. Objective. To the point. But hitting all the key facts.


Now we turn to the harm that the negligent driver caused.

This is what gives your claim value.

Generally, continue to be objective and not overly dramatic, but don’t be shy either. Tell the whole unvarnished story of how the accident affected you.

I recommend that you start with a summary of all injuries you received. You can use something like this . . .

As a result of this crash, I suffered a partial, full thickness tear of the supraspinatus muscle, part of my left rotator cuff; acute cervical strain; acute and chronic lumbar strain; and multiple bruises and abrasions.

Based on your review of the medical records, use the actual medical terms for your injuries instead of non-expert terms such as “whiplash.” (If your doctor used the term whiplash, you are probably stuck with it.)

Go through your medical records and make sure you identify all diagnoses that your doctors have made.

You want to give a complete picture of your medical injuries. And you want to “check the boxes” that the insurance company uses to evaluate claims.

What I mean is that your insurance company is probably using some sort of claim valuation software to evaluate your claim, or to help evaluate your claim. The most well-known claims valuation software is called Colossus. You can learn much more by reading my article titled “Colossus Settlement Software: What Is It And How Does It Work.”

Because they are important in a Colossus evaluation, also describe your symptoms and complaints, such as . . .

  • Muscle spasms

  • Dizziness

  • Radiating pain

  • Restriction of movement

  • Nausea

  • Vision impairment

  • Neurosis

  • Depression

  • Anxiety

Next, explain the diagnostic and treatment procedures you had to go through. You can summarize your treatment, or you can literally explain it medical visit by medical visit. Use the level of detail that you think will make your claim stronger.

If you still have any symptoms that you attribute to the accident, describe them, such as . . .

Even now, nine months after the accident, I still suffer from neck pain when I work at my computer for more than 30 minutes or when the weather changes.

Having explained your injuries and treatment, you should next list your financial losses. Something like this will do . . .

As a result of this incident, I incurred the following expenses to diagnose and treat my injuries:

1. Peter Jones, M.D. $549.00

2. Malinda Chan, R.P.T. $1,333.79

3. Smithson Radiology $1,199.00


Next, explain your other main financial loss, which is your lost income. Say something like this . . .

Because of my injuries, I was unable to work for one (1) week. As the attached letter from my employer states, I earn $750.00 per week.

If you have any other financial losses as a result of your accident, list them next. Examples are such things as the cost of hiring a housekeeper because your injuries precluded you from doing housework, or the cost of a service to mow your lawn because you couldn’t.

Then, turn to an explanation of how the accident and your injuries affected you.

Before you write this section, review the journal that you have been keeping since your accident to remind yourself of all the consequences of the accident.

Frankly, I’m not sure the insurance company cares much about your explanation of how the accident affected you. They focus more on your medical records.

But tell them anyway because they should care. To evaluate your claim, they have to know all they are up against.

(I assure you that if you cannot settle and your case ends up in court, the judge or jury will care about your explanation of how the accident affected you.)

So, explain how you were unable to do your normal activities or how you were not able to do your normal activities as well, or as much as usual. Talk about missed opportunities, such as a planned vacation (which may also add to your financial claim if you lost a non-refundable deposit).

Tell them about your pain and what you had to do to reduce it, such as take strong medicines, change positions frequently or lie down.

The last thing you put in your settlement letter is the “demand,” the amount that you will accept to settle your claim. Join your demand with a brief summary of your case, such as this . . .

As a result of your policyholder’s carelessness, I have suffered severe, painful and permanent injuries, including an ugly surgical scar on my face. In view of my injuries, the medical bills and lost income that I have sustained, and other relevant considerations, I think that $50,000.00 is fair compensation, and I would accept that amount to settle my claim.

Keep this in mind as you draft your demand letter: Especially if Colossus is involved, the claim evaluation system used by insurance companies is based on recoveries for an average case involving particular injuries. In any way you can, show the adjuster why your case is not average, but exceptional. That is, emphasize the seriousness of your injuries, the extensive treatment you received, the significant effects on your life, anything that makes your case exceptional.

I don’t normally do this, but some people like to close the demand letter with a deadline by which you would like a response from the insurance company. They might say something like this . . .

I would like a response within two weeks of the time you receive this letter. If your response will take longer, please contact me and let me know when you will reply.

Settlement Letter Details


Document everything.

The insurance company believes nothing that you tell them but documentation gets their attention.

One way of thinking about it is that you are dealing with a (probably low level) bureaucrat who does not want to make a mistake and open himself up to criticism by a superior. The way he avoids criticism is having documentation to support everything he does. Give it to him!

Attach anything you have that documents what you are saying, including such things as these . . .

  • the accident report

  • photos of the accident scene

  • witness statements

  • all medical records

  • all medical bills

  • documentation of lost income

  • documentation of any other financial losses, such as bills from babysitters or housekeepers you had to hire

  • photos of injuries or treatments


Generally, shorter is better than longer. After all, you want your demand letter to be read.

However, make it long enough to completely tell your story.


Of course, you should keep a copy of the demand letter you send.

Send copies of your documentation. Keep the originals in case you end up in court.


Write your demand letter as you would any business letter.

At the top, include your name, the name of the driver that the insurance company insures, the date of your accident and your claim number.

I recommend that you use subheadings to make your demand letter more readable.

Car Accident Insurance Settlement Demand Letter Tips And Strategy

As you prepare your car accident insurance settlement demand letter, consider these tips and strategic considerations . . .

  1. Be polite. Why? Because it helps. The insurance company Bad Guys have the power to say “no” and require you to take your claim to court. You may end up in court, but go there for good reasons, not because your rudeness annoyed some insurance adjuster.

  2. Be professional. For the same reasons as I just stated. Being angry and frustrated doesn’t help get you to your goal of a fair settlement. In fact, it gets in the way.

  3. Follow-up. Show your professionalism by following-up when things don’t happen when they should. If an adjuster told you that she would contact you by a certain date but did not, call on the deadline day or the following day and find out why.

  4. Establish a “Let’s Solve This Together” Tone. A very effective way to negotiate a claim is to approach it NOT as an adversarial matter but as a joint problem to be solved – figuring out a fair settlement that will save both sides the time, expense and uncertainty of going to court. It’s not easy, but when you can pull this off it can be extremely effective.